People"s Choice: In This Fall"s Open Enrollment More Health Care Via Private Exchanges

Walgreen Walgreen

By 2018 more people will use so-called private exchanges than similar ones created by the Affordable Care Act, according to a recent analysis by Accenture. 

Walgreen, Sears and Aon Aon Hewitt, among the earlier pioneers in this new approach, give employees a credit to buy insurance in an online marketplace.

Already an estimated 3 million Americans are getting insurance from their employers this way, which is triple the number of active employees that were buying from private exchanges a year ago, according to Accenture Accenture, which projects 40 million Americans will be buying on private exchanges in 2018. Employees get a credit or subsidy, and are sent to buy a plan on a private market place akin to Amazon.com Amazon.com or Orbitz in their respective industries.

Aon Hewitt, the largest manager of a private insurance exchange, says that the approach reduced growth in health insurance costs for its clients’ active employees to 5 percent, compared to 7 percent for most large employers.

So far, Walgreen has been the largest company to disclose participation by workers in its private exchange. The pharmacy giant says more than 220,000 workers and their dependents are getting coverage through the Walgreen proprietary “Live Well Benefits Store,” a marketplace that is an outsourced solution through Aon Hewitt Corporate Health Exchange.

Aon Hewitt, Mercer and Towers Watson (TW) are the leading consultancies pushing the exchange approach for both active employees and retirees with IBM (IBM), AT &T (T) and Time Warner moving their workers to retiree private exchanges. And the consultants are on the verge of having more competition as health insurance companies get into the act like Cigna (CI), Aetna (AET) and others.

“We continue to work to develop our own proprietary exchange called, the Aetna Marketplace, which we believe will offer an attractive alternative to existing multi-carrier exchanges and the current defined benefit model for health benefits,” Aetna chairman and chief executive officer Mark Bertolini told analysts and investors Tuesday on the company’s second-quarter earnings call.

Wondering how private exchanges or Obamacare exchanges will affect your health care? The Forbes eBook Inside Obamacare: The Fix For America’s Ailing Health Care System answers that question and more. Available now at Amazon and Apple.

People"s Choice: In This Fall"s Open Enrollment More Health Care Via Private Exchanges